Citadel Capital CEO Ken Griffin is arguing that the collapse of Terra (LUNA) should alarm regulators.
Griffin in a new interview say The Terra (LUNA) “catastrophe”, which removed the peg of the blockchain protocol’s flagship stablecoin, TerraUSD (UST), should motivate authorities to come up with necessary regulations specifically for stablecoins.
“I think the Terra catastrophe should actually sound a wake-up call for DC to focus on thoughtful regulation. And stablecoins in particular require that they be regulated almost appropriately because of their name.”
The hedge fund CEO said there are still questions about the reserves backing Tether (USDT), the largest stablecoin by market cap and volume. According to Griffin, evidence of reserves backing stablecoins must be available and verifiable.
“Bloomberg has done an amazing job with Tether. What’s Behind Tether? The fact that we don’t know is completely absurd.
To show that you have a stablecoin worth a dollar, you need to be able to back it up with a custodial account showing the assets that define that stability.”
Just as exchange-traded funds (ETFs) are required to regularly disclose their underlying assets, Citadel Capital’s CEO says stablecoin issuers must be required by law to regularly disclose reserves backing fiat pegged crypto assets.
“Just like we reveal our ETF holdings every day, we need to regularly disclose the content behind stablecoins so people know if their money is safe or not.”
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